Sitting at the southernmost point of Africa, South Africa is a land of diamonds, gold, and fine wine. It has overcome racial challenges, as well as many other cultural and economic hurdles. Now, South Africa is emerging as one of the most prominent, potential business markets in the world.
Apartheid, a racial segregation policy introduced by the all-white constituency in 1948, created an isolated economy in South Africa. As a result of economic sanctions and inefficient labor market policies, the manufacturing-intensive economy consistently under-performed for over 40 years. In 1994, the government realized the economic unsustainability of Apartheid and restructured the economy. Since then, South Africa has enjoyed continued economic growth, with its GDP growing 179% from 1996 to 2011. It is now the economic power-house of sub-Saharan Africa and the second-largest economy in Africa. One of reasons behind this strong economic growth is that the country has repositioned itself for strategic trade and has diversified its trade partners. The country has expanded its export products from mineral resources to wine and manufactured goods such as automotive parts and electronics. Also, as economic growth in Europe and the U.S. slowed down, South Africa set its sights on trade partners in Asia and Africa. As a result, South African exports grew by over 600% from 1994 to 2008.
Although the country is still facing issues in education and labor efficiency, it is growing rapidly and should continue to do so. During my three-week trip to South Africa this summer, I saw massive opportunities in multiple segments of this emerging market. Stay tuned to our blog over the next few weeks for additional insight into South Africa's economy! This gE blog series will focus on the following topics: internet business opportunities, ostrich farming, the manufacturing industry, and the wine industry.